Gas prices. We have data on the weekly average retail price (cents per gallon) of regular gas nationwide from 2002 through the early part of 2007. Here’s a time series plot.

Which model is the better fit for the data?

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Price 301 251- 201 151 2002 2003 2004 2005 2006 2007 Year Here are a 3-point moving average and a 3-term autore- gressive model fit to these data. 300- 250- Data 200+ 150- 2002 2003 2004 2005 2006 2007 Dependent variable is: Price R squared 92.5% - s 14.60 with 63 Variable Intercept Year R squared (adjusted) - 92.2% 459 degrees of freedom Coeff SE(Coeff) t-ratio P-value 7.93591 7.504 1.06 0.2946 Pricel 1.47044 0.1250 11.8 0.0001 Price2 -0.896360 0.2003 -4.47 0.0001 Price3 0.400086 0.1270 3.15 0.0026 300- 250 200- 150- 2002 2003 2004 2005 2006 2007 Year